To speak-up or keep silent?
Introduction
You may have had a case where you observed an unlawful act at your organization or your contractor, but you chose to be silent. You may have even witnessed a bribery case, but chose to be silent. You could have many reasons, one of which, could be fear of retaliation (see below), which may take ugly forms and include termination with immediate effect.
Speak-up or whistleblowing (we will use these two interchangeably throughout the article given that they broadly evolve around the same concept of raising a concern regarding unlawful or unethical act although some people associate ‘whistleblowing’ with a formal process, or a matter that is escalated outside an organisation) is a great tool as part of proper compliance programs, for someone like you to reveal what you know.
According to the European Commission “whistleblowers, i.e. persons who report (within the organisation concerned or to an outside authority) or disclose (to the public) information on a wrongdoing obtained in a work-related context, help preventing damage and detecting threat or harm to the public interest that may otherwise remain hidden.”
Whistleblowing
Safety
Imagine seeing your colleague at your workplace who is about to get an injury, and you are the only person next to that colleague. If you intervene, you may save the colleague from a serious injury. Will you intervene? The answer will normally be “yes” because a reasonable person will intervene to save a colleague.
A speak-up mechanism in a proper compliance program, in fact, encourages an employee to stop an unsafe act and to report on it. Not because reporting is something fun, but so that, among other things, an organization may learn from mistakes. After all, there are many near misses in safety critical jobs globally and only a few end up in real accidents. A speak-up mechanism allows to avoid such accidents and learn from every mistake.
Everything else
But is it only physical safety we are talking about when discussing whistleblowing/speak-up culture?
No, it is not! Whistleblowing is broader than safety and involves any wrongful acts we are aware of. The same speak-up culture in safety applies to any wrongful act and covers wide range of legal and ethical issues either at your organizations or an organization you work with. Your one tip may help in prevention of bribery, corruption, money-laundering, tax evasion, discriminatory treatment of employees or contractors, conflicts of interest etc.
The truth is in many cases, fraud can be discovered in advance or stopped timely had there been a proper speak-up culture. According to ACFE’s Occupational Fraud 2024: A Report to the Nations, 43% of frauds (researched in almost 2,000 fraud cases at the workplaces of public, private and non-government organizations in 138 countries and in 22 different industries) were detected by tips from whistleblowers!
Whistleblowing and some of the challenges
Retaliation
But not everything might be as straightforward, whistleblowers do face with retaliation which sometimes take ugly forms.
Take the recent example of Boeing whistleblower retaliation case. Boeing as we know is going through some challenging times after a number of consecutive safety incidents. This includes the January 2024 incident, when Alaska Airlines Boeing 737 Max 9 made an emergency landing shortly after takeoff in Portland, USA after one of its emergency exit doors blew out mid-air, causing passengers’ belongings to fly out of the hole and pressure on the plane to be destabilized.
John Barnett was a quality manager at Boeing who had worked there for decades and he sounded the alarm in 2017 about potential “catastrophic” safety failings at Boeing.
For years, Barnett had alleged that Boeing retaliated against him for exposing potential safety issues with the 787 Dreamliner. Barnett had alleged he was the victim of a “hostile work environment and constructive discharge,” according to a May 31, 2022, ruling against the company by an administrative law judge.
Barnett was supposed to answer questions on March 22, 2024 as part of a deposition he’d been giving earlier related to a legal dispute with his former employer Boeing. When his legal team called him repeatedly to no avail, they eventually asked the hotel he was staying at to check in on him. That’s when Barnett was found dead in his truck in the parking lot. The Charleston County Coroner’s Office stated that Barnett died from “what appears to be a self-inflicted gunshot wound,” and that the Charleston Police Department is continuing to investigate the death.
Barnett’s mother already spoke up and noted that this cannot be a suicide especially at this critical stage of legal proceedings where Barnett’s evidence was very strong.
Now, we are not the investigators and we will let the investigation continue. Our message remains however that for any speak-up to work properly, there CANNOT be any retaliation for any good faith whistleblowing. If employees feel that they will be retaliated, no whistleblower will come forward. This does not normally apply to employees reporting in bad faith or intentionally report misinformation. But the message remains clear that there can be no retaliation for good faith whistleblowing.
We should also mention in this regard that in 2019, the European Union (EU) passed a groundbreaking Whistleblower Directive (2019/1937) to enact greater protections for whistleblowers by shielding them from retaliation and creating “safe channels” to report violations of the law.
According to the Directive, once a whistleblower makes a report, they should be protected against any form of retaliation, whether direct or indirect, by their employer/customer/recipient of services and by persons working for or acting on behalf of the latter. This includes retaliation from colleagues and managers in the same organization or in other organizations in which the whistleblower is in contact with in context of their work-related activities. Member States should enact provisions to hold perpetrators accountable for forms of retaliation.
Cultural barriers
It is true that in some cultures reporting on a colleague or a third party is not a welcoming thing. However, any proper compliance program must take this into account (and that is why we always tailor our compliance programs to our clients individually) and should have a well explained rationale for having a speak-up culture.
The explanation for the most part is pretty simple, if we want to work in a safe and ethical environment, we must stop wrongful behavior and we must report about it.
And this way, we may gradually embed whistleblowing into the culture of the organization, this no longer will become something frowned upon, but part of normal day to day activities.
Reward
There is an ongoing debate around reward to whistleblowers. On the one hand offering rewards incentivizes individuals to share valuable information about wrongdoing, fraud, or other illegal activities, which otherwise they may have never revealed. Critics argue however that this is subject to abuse or misuse of reward programs, for example through false or frivolous allegations made purely for financial gain.
A number of countries have introduced rewards for whistleblowing. For example, the US whistleblower reward laws are incredibly powerful.
These reward programs are pretty efficient overall and encourage whistleblowers to come forward by having an additional incentive – a reward!
The US Securities and Exchange Commission’s (SEC) Whistleblower Program has awarded more than $1 billion to whistleblowers since the inception of the SEC’s whistleblower program in 2011.
The Internal Revenue Service (IRS) offers rewards to individuals who report tax fraud or underpayment of taxes. Whistleblowers may receive awards of up to 30% of the additional tax, penalties, and other amounts collected by the IRS based on their information.
The US Foreign Corrupt Practices Act permits rewards to whistleblowers who provide original information about bribes paid to foreign government officials by publicly-traded companies or U.S. persons. Whistleblowers are entitled to a financial reward between 10% and 30% of all sanctions obtained by the U.S. government. These rewards are available to non-U.S. citizens, for bribes paid outside the United States. The whistleblower claims can be filed anonymously and confidentially.
In the EU, debates for rewarding whistleblowers are intensifying in the meantime, especially after adoption of the Whistleblower Directive (2019/1937) mentioned above.
Important to mention that some companies have implemented their own whistleblowing reward programs to encourage employees to report internal misconduct or violations of company policies.
Conclusion and key takeaways:
Keeping silent about a wrongful or unethical act is of itself a burden, and organizations should create real speak-up mechanisms for whistleblowers to freely share their concerns or allegations in good faith for them to be properly investigated (which of itself is a separate topic because investigations play a crucial role of any well prepared compliance programs). After all, speaking-up allows organizations to look at the mirror and improve and no organization can do that without whistleblowers!
- Whistleblowing will save you time, money, resources, may help keep you staff or executives out of jail and will help you become a more compliant organization
- Whistleblowing is only possible if an organization has a proper compliance program not a fake one to please the banks or other third parties
- If people don’t speak up or are retaliated for speaking-up, your organizations will never improve and will lose the competition
- Whistleblowing should become part of organization’s culture, that is how it can be efficient with every employee advocating for it when applicable and implementing
- If an organization has not enough funds for an external party to manager their whistleblowing (which is what ideally should happen), it can always be organized in-house provided that certain safeguards are in place
If you need any help in establishing your compliance program or discuss whistleblowing, let us know and we will be glad to chat with you.
By: Elshad Rustamov
The Consultant Danışmanlık Anonim Şirketi
